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Apple in discussions to buy PalmOne?

Fri Apr 1, 2005 - 12:29 AM EST - By James Hromadka

Dawn of a new era

In recent years, Apple has shunned PDAs, but with the rise of the iPod and the iTunes Music Store (iTMS), the company has been positioning itself to become a player in the mobile phone market. Motorola has been planning to release a mobile phone capable of playing songs purchased through the iTMS, but ever since Motorola canceled the phone's unveiling at the recent CeBit show in Germany there have been questions about when the iTunes phone will come to fruition. Some say that cellular carriers are reluctant to sell the phone because it could cut into ringtone sales. Motorola claims that the delay was because Apple prefers not to announce a product until its available for purchase.

Apple does not want to sit still and wait for the dust to settle between Motorola and the carriers, so it is currently undergoing negotiations to buy PalmOne as an alternate strategy according to a source who calls himself "Juan Abril". The company will sell Apple smartphones at its retail stores and other channels until carriers get on board. While negotiations with PalmOne are still in the early stages, Apple hopes to be able to announce the purchase at its upcoming developer's conference in June.

With recent executive shuffling at PalmOne, Apple sees the company as distracted and ripe for the picking. According to sources from within Apple, the hardware portfolio is there, but PalmOne just does not "get it." A smartphone with the Apple Touch—more intuitive controls, better integration for included applications, etc— could do as well as the cultural icon that is the iPod. Apple would also be more successful in getting PalmSource to move the Palm OS fully into the new age of handheld devices. For most consumers, the PDA is dead—long live the smartphone—and Apple wants to take advantage of that.

The company already is developing a successor to the Treo dubbed "Apollo Fir." Jonathan Ives, designer of the award-winning iMac, is hard at work on the device. Expected features include the ability to play iTMS songs and buy them directly to the phone so a computer is not needed. Apple will role out iTunes 5 at the same time, enabling ringtone purchases. The company is also undergoing talks with the mobile carriers to allow iTMS purchases to be billed to customers' mobile phone service.

Based on information from sources inside Apple and PalmOne, TreoCentral has created a conceptual drawing of what the device will look like. Although the device will not be released until late this year, it won't disappoint.

Click here for the drawing.

Discuss the news here.

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